FOREX-Euro hits two-year high, Switzerland named currency manipulator

  • 12/16/2020
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(Adds Treasury report on Swiss franc, U.S. data, updates prices; previous LONDON) * Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E By Karen Brettell NEW YORK, Dec 16 (Reuters) - Strong euro zone survey figures and hopes of progress on Brexit negotiations pushed the euro above $1.22 against the U.S. dollar on Wednesday for the first time since April 2018. The Swiss franc, meanwhile, gained briefly after the U.S. Treasury labelled Switzerland a currency manipulator. The euro has risen nearly 13% since the European Union announced a recovery fund in May. Stronger economic activity data in recent months have also boosted bets that Europe is likely to outperform the United States in the coming months. Those expectations got a further boost with manufacturing survey data from Germany and France indicating that Europe"s biggest economies may be recovering quickly. and Against the U.S. dollar, the euro rose 0.31% to $1.2186 after earlier reaching as high as $1.2211. "European PMIs, Brexit and a likely dovish Fed are boosting risk appetite in the currency markets," said Kenneth Broux, a strategist at Societe Generale in London. Ursula von der Leyen, the president of the European Commission, said she could not say whether the EU and Britain would reach a trade agreement, but progress had been made and the next few days would be critical. Investors are also keeping an eye on the outcome of a two-day Federal Reserve policy meeting on Wednesday. Policymakers are expected to keep the U.S. overnight interest rate near zero and signal it will stay there for years to come, a decision that analysts say will further boost risk sentiment. "There"s a feel-good momentum in the market," said Bart Wakabayashi, Tokyo branch manager of State Street Bank in Tokyo. The dollar index, which measures the U.S. currency against a basket of currencies, was last at 90.26, a level not seen since April 2018. The index slightly pared losses after data showed that U.S. retail sales fell for a second straight month in November. The Swiss franc briefly gained against the dollar after the U.S. Treasury labelled Switzerland and Vietnam as currency manipulators. It was last at 0.8846, with the dollar down 0.9% against the currency on the day. The Treasury said that through June 2020 both Switzerland and Vietnam had intervened in currency markets to prevent effective balance of payments adjustments. It is not surprising that the Trump administration might make a case about currency manipulation, given recent "runaway appreciation" of the Swissy, which is near six-year highs, said Joe Manimbo, senior market analyst at Western Union Business Solutions. Meanwhile Bitcoin smashed through $20,000 for the first time on Wednesday, its highest ever. Bitcoin has gained more than 170% this year, buoyed by demand from larger investors attracted to its potential for quick gains, purported inflation-resistant qualities, and expectations it will become a mainstream payment method. ======================================================== Currency bid prices at 8:48AM (1348 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 90.2600 90.4790 -0.23% +0.00% +90.5440 +90.1260 Euro/Dollar $1.2186 $1.2151 +0.31% +8.72% +$1.2212 +$1.2145 Dollar/Yen 103.4400 103.6550 -0.23% -4.79% +103.7150 +103.2650 Euro/Yen 126.06 125.95 +0.09% +3.37% +126.1800 +125.7200 Dollar/Swiss 0.8846 0.8855 -0.09% -8.57% +0.8861 +0.8826 Sterling/Dollar $1.3527 $1.3470 +0.45% +2.01% +$1.3553 +$1.3436 Dollar/Canadian 1.2751 1.2698 +0.43% -1.84% +1.2762 +1.2697 Aussie/Dollar $0.7561 $0.7556 +0.10% +7.79% +$0.7578 +$0.7546 Euro/Swiss 1.0780 1.0759 +0.20% -0.66% +1.0790 +1.0762 Euro/Sterling 0.9007 0.9022 -0.17% +6.54% +0.9054 +0.8994 NZ $0.7091 $0.7091 +0.01% +5.39% +$0.7120 +$0.7085 Dollar/Dollar Dollar/Norway 8.6920 8.7145 -0.24% -0.89% +8.7325 +8.6540 Euro/Norway 10.5940 10.5884 +0.05% +7.69% +10.6146 +10.5627 Dollar/Sweden 8.3597 8.3682 +0.04% -10.57% +8.3905 +8.3289 Euro/Sweden 10.1890 10.1848 +0.04% -2.68% +10.2010 +10.1680 (Additional reporting by Saikat Chatterjee in London and Suzanne Barlyn in New York, Editing by William Maclean)

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